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In an article aptly titled Punitive Damages and Class Actions, just posted on SSRN, Francesco Parisi (Minnesota) and Marta Cenini (Milan) take on the relationship between punitive damages and class actions. Here is the abstract:

Punitive damages and class actions can be viewed as sharing a common economic
function - creating optimal deterrence. This is a function that these remedies
can best pursue in different domains. When a tortfeasor causes harm that affects
many victims, the preferred remedy is a class action. This is especially so when
the amount of compensatory damages are high.There are scenarios, however, in
which imposing punitive damages represents the best solution. We identify some
of these scenarios to suggest the proper domains of these two remedies. Finally,
we identify situations where a combined use of these two remedies is desirable.
We suggest that when the amount of losses suffered by victims is so small as to
preclude a class action due to transaction costs and inactivity, it may
nevertheless be useful to combine punitive damages with a class action. Punitive
damages should be awarded within a class action if and only if there are
frictions that could prevent the injured party from taking legal action.